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San Miguel foundation assigns "center administrators" to the
communities all a long the province of San Cristobal and other
areas of the country in which it works. The foundation
specifically works with the mothers of the families which
already have or have the desire to enter into an income
producing activity, and need the capital funding to support such
activity. These center administrators move the women to form
themselves in groups of five honest and creditworthy individuals,
who have the desire to obtain a loan for business purposes.
These groups of five women unite in solidarity becoming the core
center of the program. As the foundation does not require any
formal guarantee or solvent co-signer, the group becomes the
debt guarantee. Although each member of the group receives an
individual loan,
they are responsible for repayment as a group, making sure that
each other member makes their partial payments on time. This
tightly knit structure is enormously effective in maintaining a
high level of payback on the loans. By the end of 2007, when the
foundation had over 10,000 active members and a current
portfolio of over USD$2, the program participants maintained a
level of repayment of over 98.1% of
their by-weekly payments on time.
Once the groups
are formed, they are subjected to a process of five days
continuous training in all the rules
and procedures of the program. It is very important that the
operating structure be very clear from the start, so that all
the members of the program understand completely what their
responsibilities are before they receive their loan. Once the
group is formally "recognized" by the supervising officer of the
institution, they are “graduated” and able to receive their
first loan. The first time they take home a loan, they can
request up to a maximum of the equivalent of $350.00 for
repayment in a six months period. Subsequent loans can increase
up to 30% over of the amount of the first loan, dependent upon
their adherence to the principal components of the credit
discipline of the program. Thus they are subject to such as:
being punctual in their assistance to the biweekly payment
meetings; complete on time repayment of individual loans; on the
performance of solidarity payments in case a group member
encounters a problem for repayment. In each community of the
poor rural sector of the San Cristobal and other provinces where
FSMA operates, it tries to form a ”center” , consisting of four
or five groups of five persons In each. The "center" is the
operational unit of the organization. Every two weeks in a
specific place and time, in the house of or in a community
gathering place of the locality, these women "centers" meet in
order to pay the small quotas of their loans. These include
principal and interest, plus a small amount requested for
capital(Net worth) formation. Each
of five member groups elects a coordinator who is responsible
for collecting the biweekly quotas from each other group member:
organizing the money's , and
submitting these together with the payment books to the
foundation’s center administrators. Capital formation is
encouraged, in order to obtain growth, allowing them to be able
to make ends meet through productive activities. Many times poor
families are stuck in poverty because they need the resources to
change their situation, but may only have as a source of
monetary assistance, a "loan shark " who will literally suck up
the livelihood out of their pockets. In the rural areas there
are very few and limited opportunities of providing a formal
employment, which is why many women depend on piece work in
agriculture, construction or some other form of manual labor, if
and when those are available. In order to supplement their
sources of income many will create small businesses. These
small businesswomen (small entrepreneurs), are the candidates to
become members of the FSMA program. Many are capable of
initiating or reinitiating their small businesses with the
program's loan. These businesses are of the most varied business
interests and activities, much like those which may be found in
any developed community, except that in the program's portfolio
they happen to be small in size.
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